My Company

Glenn Neasham, the insurance agent recently sentenced to jail time for selling an annuity to an 83-year-old woman was guilty until proven innocent. He didn’t get fair treatment from the system. He has become a friend of mine.

Martin then suspended much of the 300 days, which now could be 60 days in prison for good behavior. There will be three years of probation, as well.

This was pretty stiff for a first offense that leaked like a sieve.

Glenn Neasham was guilty until proven innocent. He didn’t get fair treatment from the system. He has become a friend of mine.

The jury’s thinking

It appears the jury believed Neasham stole Schuber’s money because her policy had a schedule of surrender charges. Also, they must have thought Neasham, who had no actual knowledge of Schuber’s likely Alzheimer’s, should have known she was suffering from dementia. Her condition has progressively worsened since the annuity sale date — Feb. 6, 2008. She couldn’t testify at trial.

Kudos also to California’s legislators (who crafted a minority position elder abuse law that assuredly protects all seniors from themselves); a jury (allegedly preconditioned to Neasham’s guilt); and a politically savvy insurance commissioner, Steve Poizner, and his investigators, who didn’t help Neasham one bit.

It was a perfect storm to punish Glenn Neasham, whose crime was simply selling an annuity.

If anyone goes to jail, it should be Hopkins, Martin, Abelson and Poizner. And perhaps even the Savings Bank of Mendocino, which released Schuber’s premium money to Allianz and pays paltry interest on moneys it does hold; Allianz, who approved the sale and determined suitability; and Louis Jochim, Fran Shuber’s boyfriend, who referred her to Neasham.

But, Glenn Neasham should be exonerated. He was caught in the crosshairs of a top-heavy California system that already hates and misunderstands annuities. This was more like a Bela Lugosi horror movie than doing business as usual. At worst, Glenn Neasham was guilty of not walking away from an easy sale.

Some preliminary comments

Before reading on, please review or re-read Elder abuse and product suitability: An annuity nightmare in California, then Google Glenn Neasham trial. There, you’ll find excellent articles and comments about this matter. It takes effort to understand such a landmark case. You need to get up to speed.

In 47 years as an insurance agent and member of the Colorado Bar Association, I have never seen anything like this. For two hours, I testified at the trial in support of Glenn — I must have failed.
The trial was right out of a movie. A sleepy California town. A nice courthouse. One juror with his feet on a railing. Another juror who kept smiling at me. Other jurors about to go to sleep. Rachel Abelson, who seemed like a nice lady, and a judge who was mostly silent and bored.

My testimony measured the financial particulars. I stacked the Allianz MasterDex 10 policy against a CD at Savings Bank of Mendocino, with the interest it would have credited to date. MasterDex 10 was the clear winner.

I offered to give Fran Schuber $180,000 for her policy, $5,000 more than she paid for it. Unfortunately, she can’t accept my offer now. This lady was deep into her dementia in 2011. But, her advocate could have sold the policy to me. He probably shouldn’t; it was worth more like $220,000 if annuitized. Clearly, the Schuber family benefited when Glenn Neasham sold the annuity. Depending on financial factors, they can take out a very attractive income over, say, 10 years beginning March 1, 2013.

The system has let down Glenn Neasham, a fine insurance agent. It has let down the rest of us, too. It’s time to stop this nonsense and help Glenn, a fallen friend. He must be exonerated. This whole thing could be Groundhog Day and happen to you and me — the horror of it all.

A refresher on the facts

On Feb. 6, 2008, in a seemingly normal way, Glenn Neasham sold an annuity to a lucid and fluid Fran Schuber, a willing buyer. Glenn didn’t solicit the sale. He was referred to Fran by Louis Jochim, her boyfriend. Louis wanted her to have the same annuity Glenn had sold him — the popular MasterDex 10 policy.

Glenn submitted Fran’s application, suitability forms, etc. with a check for $175,000 Fran made payable to Allianz. The money came from proceeds of a CD at Savings Bank of Mendocino. Fran kept another $100,000 in mattress bank money for emergencies. Everything was part of a financial plan that she wanted.

Allianz reviewed the paperwork, determined suitability and issued the policy. Fran Schuber (or her personal advocate) has never been dissatisfied with her purchase or needed any money from the annuity. It’s been more than four years since purchase. What more could you wish for?

There was only one problem: An unhappy manager at the bank complained to California Adult Protective Services, fearing Fran Schuber might be “under the influence” of Louis Jochim. One thing led to another. On Dec. 14, 2010, nearly three years after the sale, a disbelieving Neasham was arrested. He was charged with larceny of an elder person under California’s elder abuse law.

The law

You need to know the basis for Glenn Neasham’s nightmare. I’ll make this as clear as I can.

On Dec. 6, 2010, Lake County District Attorney John Hopkins signed a criminal complaint that charged Glenn Neasham (not Fran’s caretaker) “committed theft and embezzlement — financial abuse — with respect to an elder and dependant [sic] adult.”

The liberal elder abuse law in California’s penal code spells out protection for all elders (persons age 65 or older), regardless of disability or infirmity. It also protects dependent adults (specifically persons age 18 to 64 who have physical or mental disabilities or abilities diminished by age).
In other words, in non-caretaker situations, there is protection for two age groups: (1) elders, regardless of dependency, and (2) adults ages 18 to 64 who are dependent. It doesn’t take both elder status and dependency.

Then why did DA Hopkins ascribe both elder and dependent status to Fran Schuber? I am not a California criminal attorney; nor do I practice law in Colorado. But, I’ll bet there is one or more of three reasons:
1. Hopkins was inept.

2. By alleging both circumstances, he elevated what Glenn Neasham did from theft from an elder to theft from an elder who was also dependent on someone.

3. He wanted to throw the book at Neasham and read the law later.
He may have thought that California law (in the minority — 12 U.S. jurisdictions at my last count) was like that in the majority of other states (38) and provided an objective measure of exploitation (dependency and mental or physical abuse). It doesn’t when it comes to non-caretaker theft from seniors age 65 or older. All this seems more like errors in a brutal comedy that never ends.

What’s more, just what did Neasham do to Fran Schuber? In the end, he was convicted of a single count against her under a straight larceny theory, not fraud, embezzlement, theft by trick or false pretenses. In our terms, this would mean he intended to take her money. Then, he did it and she lost it. Finally, it went to his personal use.

Plain and simple, he was convicted of selling an annuity that had a schedule of surrender charges. That amounted to intent to steal her money, which somehow got into his pocket. It didn’t.

In fact, Glenn Neasham didn’t take anything. The $175,000 premium went directly to Allianz. Fran Schuber didn’t lose anything. Four years later, she now has some $220,000 in annuitization funds. And Allianz never took any of Schuber’s money to pay Neasham’s commission. Any remuneration to Neasham was paid directly from Allianz general funds.

Neasham didn’t intend to steal anything either; to the contrary, he intended to help her, which is what he did. She is much better off with this annuity than with money left in a CD.

Editor's note: Part two will be posted on ProducersWEB tomorrow. Be sure to check back for Allianz' reaction to the Neasham trial, the potential affects of this case on anyone who sells to seniors, and more details on steps advisors, carriers and others in the industry can take to support Mr. Neasham.

About the Author

Richard W Duff, J.D., CLU, is a financial advisor in Denver. He is the author of numerous books and reports on estate planning and annuities, including his comprehensive manual, “The IRA Gold Book, Financial Solutions for Clients With Significant IRAs.” His latest book, "Retirement Breakthro... More